Global investment firm KKR & Co. Inc. (NYSE:KKR) recently announced that it has entered into a definitive agreement to acquire a cloud-first security solutions provider, Barracuda Networks, from Thoma Bravo. The financial terms of the deal, which is expected to close by the end of the year, have not been disclosed so far.
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Following the news, shares of the company declined 1.7% to close at $55.31 on Tuesday.
Strategic Impact
As Barracuda offers a wide range of cybersecurity solutions, its acquisition is strategic to KKR’s endeavor in strengthening its position in the cybersecurity space.
Further, the move is expected to allow KKR further accelerate growth and support its strategic expansion into key areas like managed detection and response, extended detection and response, and secure access service edge technology.
Management Commentary
The Managing Director at KKR, Bradley Brown, said, “Barracuda has built an impressive portfolio of solutions that are helping SMEs around the world protect their data and address critical security challenges. We see a tremendous opportunity for long-term growth as these businesses continue to invest more in cybersecurity and we look forward to helping Barracuda scale and deliver next generation products that meet this growing need.”
Stock Rating
On April 12, Jefferies analyst Gerald O’Hara reiterated a Buy rating on the stock. The analyst, however, lowered the price target from $92 to $86, which implies upside potential of 55% from current levels.
Consensus among analysts is a Strong Buy based on seven Buys and one Hold. KKR’s average price target of $82.56 implies upside potential of 48.8% from current levels. Shares have gained 6.7% over the past year.
Key Takeaway
With digital adoption increasing by the day, KKR’s move to acquire Barracuda is expected to allow the company to gain a strong foothold in the cybersecurity solutions space to help small and medium enterprises.
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